This week, the Bitcoin price chart resembles a roller coaster. Bitcoin started the week at around $63000, then, thanks to a sharp rise, reached an all-time high around $68564. Soon, the maximum was replaced by a bearish correction to the area of 66500. Yesterday we saw a new high around $69,000. This night, the price also dropped sharply below $65000, as it rose the day before.
Last week the Bitcoin situation seemed pretty calm with the cryptocurrency stuck in the range of $60000-$62000. But this week the market reminded investors what volatility is.
At the moment, the asset has recovered slightly and is trading around 65500. Its market capitalization is over $1.2 trillion, and its dominance over altcoins is 43%.
The rise in the price of BTC was pretty obvious given that the digital asset serves as a solid hedge against inflation. Rising inflation in all major world economies can become an additional driver of the rise in the price of Bitcoin. And already some Wall Street players are joining the price rally over inflation concerns. Moreover, gold is beginning to yield to Bitcoin as an inflation hedging tool. As a result, Bitcoin is finding increasing acceptance among the big players.
Why Bitcoin began a correction
Although yesterday the price of BTC came close to the mark of 69000, it did not hold out in the area for very long. Bitcoin entered a sharp correction, dropping nearly 10% to a low of 64000. This led to massive liquidations in the market. It is worth noting that the price of Bitcoin began to decline after the sharp decline in the price of US stocks. The Nasdaq Composite Index declined by 1.66% during the day.
It will be interesting to see if BTC finds support in the area of 64000 to start a new upward journey.
On the hourly chart, the BTC/USD pair dropped below the support level of 65000 and the 100-hour simple moving average. There was also a break below the major bullish trendline that provided support for the pair around 66300.
If the BTC/USD pair fails to hold above the level of 65000, it may continue its bearish correction. In this case, the immediate support is near the level of 63500.
If the bulls recover from such a “cold shower” and try to bring Bitcoin back to the area of the recent ATH, they will first have to overcome the resistance around 65800. Successfully breaking this level will open the door to the next resistance around 67500.